\section{Conclusions And Recommendations}
\label{sec:ConclusionsandRecommendations}

I have shown that small insurers are less efficient than large insurers due to higher variation in their Population Loss Ratio Estimates. Capitation forces clinically efficient health care providers to become inefficient insurers and inefficient clinicians, cutting benefits lower than PI's levels even if PI transfers 85\% of its premiums to risk assuming health care providers and PI's premiums are adequate for the population insured. Capitation increases the financial risks of operating health care facilities, disproportionately benefits risk transferors, harms providers and patients, and forces our health care (finance) systems to become less, not more, efficient.

Capitation only works in very inefficient health care (finance) systems when providers can avoid cutting medically necessary and appropriate care, because they are being overpaid (See Section~\ref{sec:RiskAdjustedPremiums}). Capitation risk assuming health care providers the sizes of $D$ and $E$, cannot possibly maintain service quality and quantity unless $PI$ pays them more than 85\% of its premium revenues, but $PI$ cannot pay out more than 90\% of its premium revenues without losing money on each contract. 

The implications are stark: Capitation cannot steer our inefficient health care (finance) system toward efficiency because providers who were operating efficiently before accepting capitation must cut medically necessary and appropriate care. Capitated providers either cut the quality and/or quantity of health care services they provide or some will fail. Capitated health care providers have been failing financially for four decades and capitation advocates still ignore the evidence that capitation does not work \citep{Mayes2005}.

Capitation steers health care (finance) systems from inefficient states in which some, if not all, patients receive excessive and potentially harmful diagnostic and treatment to inefficient states in which some, if not all, patients do not receive medically necessary and appropriate care.

To improve health care (finance) system effectiveness and efficiency we must identify and eliminate all inefficient insurance operations, beginning with risk assuming health care providers, then by reducing the numbers of our smallest, most inefficient health insurers. $NHI$ is the most efficient insurer possible, but 30 - 40 large, efficient $B$s, can offer higher benefits than $PI$, need less Surplus and better protect health providers from financial risk. Efficient insurer Bs can earn reasonable and sustainable profits, avoid operating losses, and avoid insolvency with probabilities close to those of $NHI$. Increased insurer efficiency, not capitation, is the path toward more efficient health care (finance) systems.
